Friday, March 27, 2009
Swapping (Trading) Houses
The next best latest and greatest thing in real estate? Two homeowners swapping houses.
Why would anyone want to swap houses when they can sell them instead? There are several reasons make this an appealing situation:
1 - There's no need to do any repairs, upgrades or updates. Both properties are sold "as is".
2 - There's no time for the houses to have to sit on the market. Each house already has a buyer, so there's very little risk.
3 - There's no need for there to be any "creative" financing such as bridge loans, etc.
If this is for me, how does this happen?
1 - The hardest part is finding someone else who wants to swap houses. If a house is listed, it can be marketed as a potential swap as well as a regular sale. However, there are people who want to swap to alleviate all the hassles of having to do anything to their house to get it ready to sell. They are out there.
2 - Two contracts are drawn up. One is for your home and the other is for your buyer's home. Both contracts have agreed upon prices, conditions and terms acceptable to both parties. For this to work, both closing times have to be simultaneous.
3 - Both contracts are taken to each respective lender and the lender proceeds as usual. The contract for the purchase of each home verifies that the funds will be available, and that the debt to income ratios will be within the acceptable range allowed by the lender.
4 - Inspections are completed and the rest of the process proceeds as normal.
5 - Closing happens and everyone's happy.
Interested in swapping houses? Give me a call. I can help you with any and all of your real estate needs.